Tata Consultancy Services (TCS), India’s leading IT services company, is preparing to roll out its annual salary increments for the financial year 2024-25 (FY25) in March 2025. According to a report by a news agency, the revised salary structures will be reflected in employees’ pay starting from April 2025.
The report indicates that the expected salary hikes at TCS will range between 4% and 8%, aligning with recent trends in the IT sector. While performance-based increments may lead to variations across different business units, the overall percentage increase remains modest compared to past years.
Tata Consultancy Services (TCS) is not the only major IT company planning salary revisions. Infosys, India’s second-largest IT services firm, has also informed its employees that salary hike letters will be issued before the end of March 2025. The company is currently in the final stages of determining compensation increases, with reports suggesting that Infosys employees may receive hikes in the range of 5-8%.
The IT industry in India has witnessed a gradual decline in salary hikes over the years. During the COVID-19 pandemic, when IT firms experienced a business boom due to increased digital transformation projects, salary hikes were often in double digits. However, in the last two years, economic uncertainties, global market slowdowns, and reduced business growth have impacted salary increments.
The recent slowdown in IT industry growth has led to single-digit increments across major firms, reflecting market challenges and cost control measures.
Apart from overall company performance, TCS has linked salary hikes and variable pay to employees’ compliance with its return-to-office (RTO) policy.
In early 2024, TCS made it mandatory for employees to return to physical office spaces, emphasizing a hybrid or full-time in-office work model. Employees who complied with the RTO mandate are reportedly more likely to receive higher salary increments, while those who continued remote work may see lower hikes.
A TCS employee revealed, "We have been informed that the hikes will be around 4-8%. Business units that performed well typically get better hikes, but overall, the increments have not been very high."
As of now, TCS has not issued an official statement regarding the salary hikes.
In February 2025, TCS released its quarterly variable pay (QVP) for the October-December 2024 period. Reports indicate that:
TCS categorizes its employees into different grades, starting from Y (trainees) to C1 (systems engineers), C2, C3-A & B, C4, C5, and CXOs. Employees in the senior-level categories (C3B and above) were affected the most by the lower variable pay percentages.
Several TCS employees have expressed concerns over the declining salary hikes. An employee who has worked at TCS for over eight years shared their experience with ET, stating:
"The hikes have been low for the past three to five years. The increments have declined since the exit of former CEO N Chandrasekaran."
N Chandrasekaran, who served as TCS CEO from 2009 to 2017, led the company during a high-growth phase. He is now the Chairman of Tata Sons. After him, Rajesh Gopinathan led TCS until May 2023, and the company is currently under the leadership of K Krithivasan.
TCS’s upcoming salary hikes for FY25, ranging between 4-8%, reflect the current state of the IT industry, where increment percentages have declined compared to previous years. Factors such as global economic challenges, reduced business growth, and return-to-office policies have influenced salary adjustments.
While junior and mid-level employees may receive full variable pay, senior-level staff have experienced lower payouts. Meanwhile, Infosys has also announced similar salary hike plans, reinforcing the trend of moderate pay raises across the sector.
As the Indian IT industry navigates financial and operational challenges, companies like TCS and Infosys are balancing employee compensation with business sustainability. Going forward, salary increments will likely continue to be performance-driven and linked to workplace policies.